The merger of "big six" household energy suppliers SSE and npower has been given final clearance by competition regulators.

The Competition and Markets Authority (CMA) announced the decision after an in-depth review into the proposed tie-up.

That inquiry dismissed concerns about the potential impact of the merger on prices and controversial standard variable tariffs (SVTs) and pointed to improved competition in a market with at least 70 firms.

It found the two companies were not "close" rivals when it came to the thorny issue of default tariffs - with SVTs also set to face a government-inspired price cap from this winter.

The watchdog confirmed its preliminary findings as consumer groups rally against a series of price increases which the sector has blamed on rising wholesale energy costs.

Anne Lambert, who chaired the CMA's inquiry group, said: "With many energy companies out there, people switching away from expensive standard variable tariffs will still have plenty of choice when they shop around after this merger.

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"But we know that the energy market still isn't working well for many people who don't switch, so we looked carefully at how the merger would affect SVT prices.

"Following a thorough investigation and consultation, we are confident that SSE and npower are not close rivals for these customers and so the deal will not change how they set SVT prices."

The deal, first announced almost a year ago, would see SSE and Innogy - npower's German owner - demerge their UK supply operations to create a new London-listed company.

It would mean that the current big six household suppliers - which also include British Gas, Scottish Power, E.ON and EDF Energy - becoming five.

Alistair Phillips-Davies, the company's chief executive, said: "We are very pleased that the final report of the CMA's investigation confirms its provisional findings that the proposed merger of SSE Energy Services and npower does not raise any competition concerns.

"This is a complex transaction and there is still much work to do in the coming weeks and months.

"However, we've always believed that the creation of a new, independent energy and services retailer has potential to deliver real benefits for customers and the market as a whole and it is good to see that the CMA has cleared the transaction following what was a comprehensive and rigorous inquiry."